September 08, 2020
Summary of the notification and circular issued by MCA and SEBI respectively on 07/09/2020
1. MCA amends definition of Deposits with respect to Convertible Notes issued by Start-ups
To bring the definition of Deposit in line with the revised definition of Start-up issued vide G.S.R. 127 (E), dated the 19th February, 2019 by the Department for Promotion of Industry and Internal Trade, MCA has notified the following revisions to Companies (Acceptance of Deposits) Rules, 2014-
convertible notes issued by Start-ups which are convertible into equity shares or repayable within a period not exceeding ten years (as against the original tenure of ‘five years’) from the date of issue shall not be considered as deposits.
maximum limit in respect of deposits to be accepted from members shall not apply to a private company which is a start-up, for ten years (as against the original tenure of ‘five years’) from the date of its incorporation.
2. SEBI notifies cut-off date for re-lodgement of transfer deeds to 31/03/2021
As per SEBI’s circular no. 12/2019 dated 27/03/2019, the Board had clarified that transfer of securities held in physical mode lodged before the deadline (April 01, 2019), but rejected and returned due to deficiency in the documents may be re-lodged with requisite documents.
SEBI has now fixed the cut-off date for such re-lodgement to 31/03/2021 and shares that are re-lodged for transfer shall be issued only in DEMAT mode.